The Legal Implications of the ‘Ayinah Sale: A Comparative Jurisprudential and Statutory Study

This research examines the legal implications of the ‘Ayinah sale from a jurisprudential and comparative legal perspective, focusing on the legitimacy of this type of sale and its effects on the parties to the contractual relationship. ‘Ayinah sale is one of the methods used by some to circumvent the prohibition of usury. It involves selling a commodity for a deferred payment and then repurchasing it in cash for a lower price, essentially resembling a usurious loan. The research addressed the position of Islamic jurisprudence in its various schools of thought. The Shafi’is and some Zahiris held that it is permissible to sell ‘‘Ayinah based on the generality of the Almighty’s saying: “Allah has permitted trade.” Meanwhile, the Hanafi, Maliki, and Hanbali schools of thought hold that this sale is forbidden as a means of usury, based on prophetic hadiths forbidding ‘Ayinah sale. Ja‘fari jurisprudence distinguishes between sales with a conditional ‘Ayinah (i.e., sale)—which it prohibits—and sales without a conditional ‘Ayinah (i.e., sale)—which it permits with conditions. From a legal perspective, the Iraqi legislature does not explicitly stipulate the sale of ‘Ayinah. However, the application of the rules of the Civil Code, particularly Articles 171 and 172, allows the judge to intervene if the Interest exceeds the legal limits, which could lead to the Contract being invalidated or modified. The study concluded that the sale of ‘Ayinah is permissible under Islamic Law if the purchase-back clause is absent and the sale is not used as a means of circumventing usury. It is also necessary that the commodity be actually taken possession of; otherwise, it is forbidden by Islamic Law and legally void. Furthermore, such sales create an imbalance in the Contract and harm the debtor, which requires a clear legislative stance.